--Establishment of in-house venture company to promote RFID solutions--

Tokyo,June28,2001,--Hitachi,Ltd.(TSE:6501)today announced that it
has developed the world's smallest RFID* integrated circuit chip called
theµ-chip, which is thin enough to be embedded in paper.
An in-house venture company, Mu-Solutions, will be formed
on July 1, as a catalyst to form the value chains around this emerging
technology. It will collaborate with both in-house business groups
and outside companies to help expedite proliferation of the µ-chip.

The µ-chip is accessible wireless accessible and wireless at 2.45GHz,
0.4mm square, and thin enough to be embedded in paper. With the ID
information being stored in ROM (Read-Only-Memory) during the manufacturing
process, it provides high resistance to tampering. Its features in
size, security and access will find useful applications in document
management where a high level of security is needed and distribution
management where efficiency is a must. The µ-chip will open up a
new arena in electronic commerce in the era of global broadband communications
in a wide range of industry including finance, distribution, manufacturing,
sports, and entertainment. The µ-chip is a new addition to Hitachi's
product line catering for the need of its existing customer-base which
includes the worldwide smart-card industry.

To speed-up business development, an in-house venture company, Mu-Solutions,
will be established on July 1. By integrating components, systems,
and solutions expertise from both within and outside the company,
Hitachi hopes to create a market for this emerging technology and
expand the business opportunities. Another way of looking at the venture
is that it is an attempt to extract value from an intangible asset
(IP) developed by its research laboratories with a minimized time-to-market
allowance.

Features of the µ-chip

1.

Integration of a 2.45GHz high-frequency
analog circuit and a 128-bit ROM in an area of 0.4mm square silicon
to form the world's smallest RFID.

2.

High guarantee of authenticity by applying
encryption technology to the 128 bit of identification information.

3.

Enabling electronic information on networks
and information on paper or to be linked anywhere and anytime
with assurance, thus making new services possible.

RFID* Radio-Frequency Identification

Hitachi, Ltd., headquartered in Tokyo, Japan, is one of the world's
leading global electronics companies, with fiscal 2000 (ended March
31, 2001) consolidated sales of 8,416 billion yen ($67.9 billion*) The
company manufactures and markets a wide range of products, including
computers, semiconductors, consumer products and power and industrial
equipment. For more information on Hitachi, Ltd., please visit Hitachi's
Web site at http://global.hitachi.com
* At an exchange rate of 124 yen to the dollar.